tv MONEY With Melissa Francis FOX Business December 29, 2012 12:00am-1:00am EST
how you doing? my name is steve. my family's lived in this neighborhood for years. recently, things got so tight we had to go to our local food bank for help. i lost a lot of sleep worrying about what the neighbors might think. that is, until i saw them there, too. how'd i do, steve? a little stiff. you could have done a little better. what? come on. you know, i have an academy award. yeah, but not for playing me. announcer: play a role in ending hunger. visit feedingamerica.org/hunger and find your local food bank. adam: i'm adam shapiro in
for melissa francis. here's what's "money" tonight. president obama and congressional leaders try to pull off a fiscal cliff hail mary. their last-ditch meeting at the white house desperately tries to land a deal but the report he hadly not putting any new offer on the table. we have the very latest for you. not even the fiscal cliff can slow down the u.s. oil boom the production surge sets up huge windfalls for businesses outside the oil industry in 2013. who stand to reap the biggest gains? we'll drill down details so you can get in on this game. iran launches war games in the strait of hormuz flexing its military muscle in the heart of the critical seaway for global oil supplies. is iran just sabre-rattling or gearing up for something much bigger? even when they say it's not, it is always about money.
adam: and a good evening to you. melissa francis will be back after the first of the year but right now let's look at today's market headlines of the investors were largely gripped by unfolding events in washington regarding the fiscal cliff. there was little optimism on wall street. stocks fell for their fifth straight session. the dow, the dow fell below the 13,000 mark closing down 158 points. fiscal cliff anxiety sent the so-called fear index, the vix, soaring more than 14%. it is now up close to 30% this month. barnes & noble was one of the few market bright spots today. the london-based pierson learning company is investing $89.5 million in barnes & noble nook media unit. shares rally more than 5% on that news. but we've got to get back to the top headline of the day, nada, zip, zilch. president obama needing with congressional leaders at the white house ended a short
time ago and the president is reportedly giving no new offer on the fiscal cliff. the house minority leader said the meeting moved negotiations forward. so where do we actually stand on all of this? fox business's rich edson is at the white house with more and did they really move this forward and is that a good sign? what do they mean? >> well, adam, they're still assessing the fallout from this meeting, democrats and republicans. leadership returned to the hill right now and basically what we've got from the start of this meeting according to a senior administration official president obama began by offering essentially what he laid out in a speech a week ago which is to keep taxes where they are for families earning less than $250,000 a year and to extend long-term unemployment insurance benefits that is basically just a small slice of what the president had been proposing for quite some time. the administration official also says that the president is putting it on republicans to come up with a counteroffer that they say can pass the house and the senate. if not, the president said,
he wants an up-or-down vote on his proposal in the house or the senate. so congressional leaders left here. other than house minority leader nancy pelosi i'm now hearing senate majority leader harry reid has joined her in making comments back at capitol hill. we'll let you know what they say as soon as that is transmitted to us. there are other directed comments they made little progress something they have been saying after the meetings the last few months. adam? >> we're looking to turn around reid's comments so we all can hear them. when you talk about the president he is up-or-down vote, someone referred to this as plan-c. is this the offer you reported on a while back where he would move the bottom line tax increase to 400,000 for the upper incomes as opposed to 250,000? is that on the table. >> we don't know if that is the specifically the offer on the table. it started at president's opening offer 250. you could see a pathway
forward to raise the threshold up to 400, $500,000 a year, any amounts below that don't get tax increase. any amounts above that get tax increase. end of the year fixes preventing medicare doctors getting large pay cut. amt fix, prevents millions of americans paying the amt reform kick that to next year. that is sort of the path aides were seeing some variation yeah that could actually pass the house or senate. whether that was specifically discussed here or on the table we don't know that. adam: rich, stay there. i want to bring in a few of our guests to talk more about this. for more on the shock wave of the developments, let's bring in dan cato, cato institute and rick unger. rick, let me start with you, are we optomistic both sides moved the discussion forward
or is that a fancy way of saying they moved it forward and are ignoring each other. >> i say in a word no. i'm not feeling it. there is little reason to believe we'll see something small or large before the end of the year. adam: dan, what do you think, will we see something large or small? if it is small something sufficient to avoid calamity and doom and gloom or apocalypse. >> i'm less optimistic. whether it is obama's tax increase, whether we get obama's tax increase tomorrow or get it a month from now the net result is still the same. we're going to have a less competitive economy because of what is coming out of washington. adam: chime in, rick said, nah why do you say that? >> you will get a tax increase. i think number will be closer to 500,000 before we're done. certainly closer than 250,000. this is, i don't know, for years i've had to listen to this, it is going to hurt our economy if we raise taxes on the top 2%. there are many things happening that can hurt our economy.
the fact we're having this conversation two or three days before the end of the year is hurtings our economy. adam: but we've seen that. >> raising taxes isn't going to be it. adam: let me bring dan back in here. dan, i want to ask you, raising taxes only raises $80 billion at best in a budget almost a trillion dollars over budget. so what do you to fix that problem? >> all we have to do to balance the budget in 10 years limit the growth of government spending so that the budget climbs by an average 2.5% a year. in my mind, this isn't about the short term because whatever speed bump we go over we're going to go over. in the long run that is what i'm worried about, how big is government? how much of our economy's resources will be diverted and consumed by government? because i don't want to become greece or france or one of these stagnant slow growth welfare states. think evidence is very clear that fiscal policy does matter for an economy's performance. doesn't mean we have a recession if taxes go up but it does mean that government will be bigger and our growth rate in the long run
maybe instead of 2.7, it is 2.6. that doesn't sound like much but because of compounding it adds up. adam: dan, i don't think there is any danger we become greece or france in a lot of ways. we're not a socialist country yet and greece is a whole different ball of wax. rich, the discussion about the econy, the spending cuts that they're talking about do put people out of work and that would have a negative effect on the economy, would it not? >> it would, adam. real quick, a bit of news here. president obama will deliver a statement at 4:45, something i imagine we'll cover live here on fox business. adam: we will. >> 5:45 president obama deliver as statement here at the white house. as far as spending cuts are concerned, you see this argument, you typically hear republicans say, government spending doesn't create jobs. however when it comes to a number of defense cuts when it hits in their districts a number of them, if it hits companies in their districts well you have to stop defense cuts using an economic argument. when you talk about the $94
billion, well, yes there are economic effects that will be felt, the $94 billion in cuts down as sequester, you have to put that in perspective the sandy supplemental bill started out $60 billion. one storm could wipe out all the savings or. adam: that sandy supplemental bill is 60 billion, 45 billion according to taxpayers for common sense is stimulus spending that doesn't involve the hurricane. dan, i will come back to you after we listen to sound bite from harry reid, senate majority leader commenting on the negotiations today. here is what he said. >> okay. we had a long meeting in the white house. it was very constructive. we hope that it will be bear fruit but that is what we hope ad lot. i think that the next 2 hours will be very instructive what we're able to accomplish. >> was there progress? discussion of a concrete proposal? >> we talked about a lot of things.
there is no concrete proposal at this time. we have a number of different directions we'll try to take and we're going to see what can be worked out. >> will you work on a piece of legislation? >> pardon me? >> is it a good sign or bad sign you guys are not talking much after this meeting?. >> i hooe everything is a good sign. i had my confidence he destroyed on other occasions but i hope it is not on this occasion. >> what about timing? >> timing is we're out of time. we have to do it now. i said the next 24 hours will be very morn. >> with are you considering amending house revenue bill. >> we're considering a lot of things. that's enough. that's enough. >> thank you, senator reid. adam: dan and rick, very quickly let's wrap this up. dan, what i heard the majority leader say, senate majority leader say we have to save our phoney baloney jobs and he didn't offer anything, do you agree? >> well-put. >> he didn't say anything at all why i'm worried. we're not greece now but we might be 25 years down the
road with that so-called leadership. adam: rick >> you put it really well. they're all saying we have to save our phoney baloney job on both sides. i don't know about you but i'm fed up with it. adam: we have to source that quote. it is mel brooks. in all seriousness president obama will address the nation at 4:45. we'll get a statement about the fiscal cliff negotiations. we'll bring that to you on the fox business network. everybody. dan, rich and rick, thanks very much for joining us. we have to talk about stocks which got thrashed after word president obama was putting no new fiscal cliff proposal on the table. with the u.s. closer to diving off the cliff than ever, monday is shaping up to be a pivotal day for the markets. should you, should an investor look for their emergency parachute, or should you stic this thing out? joining us right now, jonathan hoenig, portfolio manager at capitalist pig.com. spencer patton, chief investment officer at steel vine investments. jonathan, i have no choice but to stick it out. i'm a poor slob with a
401(k). so what do i do? i stick it out, right? >> well, what the president is putting you through, adam, what harry reid is putting you through, harry reid thinks the next 20 four hours are important? you're supposed to as investor be thinking long term. to leave this down to the last minute like this is cruel and is a distic to investors. one of the reasons you saw the tremendous drop today. you mentioned monday night being volatile. that is holiday day. it is thinly traded. with the fiscal cliff literally occurring you can bet it will be extremely volatile sunday and monday night. adam: spencer, if i were in individual stocks seems not it the time to sell them or will we see that. >> the important thing to keep in mind with stocks, one part we have to worry about is the fiscal cliff. we have taxes and spending to worry about there. but what the real issue is, in my opinion is the debt ceiling debate that is just around the corner. adam: oh, joy of joy. >> if we get some deal with the fiscal cliff which i think we will and our
politicians are the worst even a blind squirrel will occasionally find a nut. they will get this done sometime by january 15th or something like that. if they do not extend the debt ceiling you will have close to armageddon at the end of february and march. adam: spencer i take issue what about our politicians being the worst. our congress is the best congress money can buy. don't forget it. jonathan he is talking about armageddon because of the debt ceiling. i would be terrified if i were not in the market putting my toe in this. there will have to be buying opportunity if people panic and sell. >> which market, adam? that can be the story of 2003 and headlines are obviously scary they have a tendency to sell stocks and buy bonds. that is the safe move. i think the reverse will be true in 2013 and stocks will look quite attractive versus bonds. a highly manipulated market government stepped in and tried to hold interest rates low. once inflation starts to show its head, i think bonds,
supposedly the safe asset that could be where the real danger lurks in 2013. adam: jonathan i will let spencer respond to that i heard similar comments last four years get out of bonds, get out of bonds. spencer, what do you think?. >> i don't see anything compelling about stocks. there is no panic in the market other than down a 150 point day. we're seven or 8% off all-time highs of the market. if you had a sell-off of 20 or 25% that would get me more interested in stocks. but there are no valuations that are compelling, jonathan, go ahead. >> you haven't seen panic but you haven't seen a lot of investment either. most "joe six-pack" investors sat out the rally. they have been it something in bond. they're putting money into bond funds, taking it out of stock funds. even with today's selloff, most arage investors are undervested into the market where they have been in recent months and years. adam: i heard one analyst on competing network he expects correction to be 10%. he was saying five to 7%
after the first of the year as people panic to try to figure all this out. you don't think that is going to happen? >> stocks correct. that's what they do but i think you have to try to look beyond the day-to-day headlines and look for a 20, 30, 40% move. that canned happen when you try to trade off harry reid's last sound bite but i do think if you're ready to withstand some risk with a portion of your portfolio stocks are the best asset class in town right now. adam: spencer you have 20 teches and the last word. >> all right. i think the risk/reward is just not there. if you're looking for 20, 30, 40% in the stock market i think that is what we've seen off the lows in 2008. we had the generational move. now it is time to wait and step aside. buy housing. invest in gold. invest in commodities. a lot of alternatives. stocks are the no the place you want to be. find a diffent asset that will still do well in inflation. i would buy housing here. adam: spencer, give you one word, plastics. spencer patton, jonathan hoenig, thank you very much. just when you thought the fiscal cliff was a lot of
fun we get the debt ceiling. that will be a load of joy, wouldn't it. oil companies are not just the only winners from the u.s. production boom. billions of dollars are about to be dumped on a huge variety of businesses this year. details whh businesses will see some big-time gains and how you can get in on the action. plus iran launches six days of war games in the strait of hormuz. is the regime preparing to stir up trouble in the one of the world's critical oil routes? more "money" coming up
adam: if you're just joining us it has been a wild day in those negotiations over the fiscal cliff. president obama's meeting with congressional leaders ended about an hour ago. the president will make a statement on the fiscal cliff at 5:45 eastern time. we'll take that same live at fbn we have a picture of the white house for you and we will keep you posted when the president comes to the camera. the oil boom doing more than increasing chances we'll become energy independent. it is also bringing about booming investment in the transportation industry. a new report says estimated $45 billion, you heard me correctly, $45 billion bucks
will be spent new, expanded pipelines, railcars, rail terminals and that is just next year. how do you get in on this, right? it is a windfall. but is it realistic? we'll turn to andy lipow. andy i would have assumed it was shipped by pipeline. what is it about railcar? it seems awfully 19th century to ship oil that way. >> it is new development in the oil patch but if you look at oil production in north dakota, we simply don't have pipeline to move that oil east and west coast where we have significant amount of refining capacity. adam: what saying invest in who? the rail coanies that ship oil or the companies that actually make steel for the tracks? what do i do with my money? >> well we actually have both of them. in fact on the railroad front we have burn link ton northern owned by berkshire hathaway but other winners in this will be the union pacific, the kansas city southern.
up in canada we have both the canadian pacific and canadian national who are looking to double their rail shipments of crude oil next year. adam: is this an efficient way to ship oil? there has to be cheaper way to do this? i would imagine an investor who can get in on that would make even more money? >> no doubt it is much more expensive to move oil by tanker car rather than pipeline but the fact of the matter is we're not going to build any pipelines from north dakota through the rockies over to california. nor are we going to build pipelines across pennsylvania, new jersey, to the few refineries on the east coast. so these guys are going to be sitting with rail supplies for quite some time. adam: okay. we talked about the rail companies. who else. are there smaller companies i might be able to start researching to invest in that will part of this $45 billion bonanza just next year? >> if we look to the pipeline companies, there is a number of big winners there, starting with enbridge pipelines because they have a pipeline network from canada all the way to the gulf coast which they're
going to expand. in texas we've got sunoco low gistics who has a number about projects as does magellan and they're all going to benefit by more crude oil by pipelines. adam: okay. what about the surge in natural gas? same players in that sector or do i have other opportunities in which to invest in. >> well, on the natural gas side we actually see companies who want to convert their natural gas pipelines into crude oil service. among them we have kinder morgan who wants to move oil from the permian basin out to los angeles. etp, energy transper partners wants a line to the gulf coast. transcanada wants to move oil from alberta oil sands all the way over to quebec. adam: let's wrap up. i will challenge you on something. >> okay. adam: this sounds like music to an investor's ears. yesterday we had a guest on who said this prediction of
oil independence for the united states is way overblown. eia and the iea got it wrong. as an investor do i need to listen to the guest we had yesterday or should i ignore that and continue to proceed as if this oil bonanza continues? >> well i think you should proceed that the oil bonanza con since because worldwide oil prices are going up due to higher demand. as prices go up, it gives good access to production. i mean the production industry will grow, and the transportation of crude oil will grow wit. adam: all right. andy, we appreciate you being here. you mentioned every train company except for the atchison topeka and the sante fe. if they were in business still you would be getting in on action. >> be well, adam. adam: nebraska's department of environmental quality says it will issue its final evaluation on a new keystone xl pipeline route next week.
the state's governor is expected to sign off on the proposal. it will then be sent to the u.s. state department for review. a choppy week for oil futures ending on a flat note. crude fell seven cents. but for the week oil rose 2.4%. cold weather forecasts plus an inventory report in line with expectations sent natural gas futures climbing for the second straight session. coming up, iran's navy has taken to the straits of hormuz launching six days of war games. how it is bringing new tension to one of the world's more vital passages for oil is coming up on this program. just when the u.s. auto industry thought it was out of the gutter it may get pulled back in. why its breakout year may soon be a memory in its rear view mir railroad -- mirror thanks to the fiscal cliff of all things. that is coming up. of course president obama comments on the fiscal cliff at 5:45 eastern. keep it right here on fox business because, do you ever have too much money?
adam: that's a live picture of the white house inside the press briefing room. president obama is going to make comments from the pest room 5:45 eastern regarding the fiscal cliff. as soon as he comes into the briefing room and takes to the podium fox business will bring us his statement live right here. but firsts more sabre-rattling coming out of iran. the rogue state launching major military exercises. served in the u.s. navy for 11 years. i would imagine. you were in at some point
ever in the persian gulf area? >> i was off of somalia with the uss el paso. i was just inthe region of international commission on religious freedom in bahrain. we have quite a naval presence with the fifth fleet in the area. adam: we do, because roughly 40% of the world's oil will flow through the strait of hormuz. how concerned should we be that iran is holding these military exercises? they have done this before, have they not? >> i think we should be concerned about the message they're sending and what it means. as far as militarily, mostly defensive. what it is showing. this stunt they did last year. what they're doing is trying to tell their citizens which are seeing 60% decrease in the value of the real, 60% increase in food prices. 20 to 80% decrease of oil production in iran because they have nowhere to send it. what they're doing is telling their citizens we're in charge. we'll protect the waves. when you look at the general who recently on press tv and
iranian state tv, said w are able, demonstrating in six days of war games that we can protect commercial tankers in the region that come through and, to bring us supplies. so i think it is sending a message that for those countries like turkey, india, china, russia, are helping them subvert sanctions they will stand by them an protect them even though they're widely exposed. adam: let's do a little bit of mathematics here. it is adding up what we've seen in the past few days. just yesterday the iranian regime said they were willing to let in nuclear inspectors if israel and their threat to attack was diffused and if western sanctions were to be eased. s what does that plus now the war exercises add up to? is the regime, on a precipice? are they falling and in turmoil or trouble? >> economically they certainly are. there is a lot of russelling going on the streets that the economy is not stable.
they tried to do their own stimulus package a month ago and really didn't get much of a response. so the reel itself is failing. what they're doing to try to buy themselves political time while not giving away any posturing and letting their people know they're in fully control of their state, the region and they will not be pushed around. remember the other factor is the gulf cooperation council which has been unifying arab state gulf countries and iranians are trying to say, you know, we're not going to be pushed around by you guys either. adam: final word on all of this. is it something that the u.s., obviously we keep an eye on it but does anyone take it as a serious threat? >> i don't believe so. not the defensive postures and the naval operations. the nuclear threat is serious. if there is anything we should take from this, we need to have a stronger response. they're not going to allow them to subvert sanctions. we'll continue to push forth to have transparency in what their nuclear progra is and not allow them to coupe us
busy with other shenanigans and grandiose operations. adam: we appreciate you being with us this evening from the american islamic forum for democracy. you have a good evening, sir. >> thank you, you too, adam. adam: the u.s. auto industry hit high gear this year in 2012. the fiscal cliff could throw all its gains next year. the lauren fix, known as the car coach is here to explain why and one of my favorite topics, cars. do you think lauren can name this beautiful automobile? we'll giver her a test. what kind of car is that and test her automobile chops next. and test her's as well. is now the time to put your house on the market. top real estate expert says, yes. she is here with details. we'll challenger. we awaiting president obama. he will take the podium in a matter of minutes and will bring you a statement on the fiscal cliff live. "piles of money" is on the
adam: we've got a live picture for you of the white house briefing room. president obama is going to make comments about the fiscal cliff at 4: -- 5 len 45 eastern, we'll take them live on the fox business network. auto industry is heading toward the best year since 2007, great news for sure but the fiscal cliff,
believe it or not threatens to run the them off the road. heres we details, lauren fix. crew tells me they will give me 30 seconds heads up. folks that love cars you will want to be a part of this. how will the fiscal cliff, we'll have 15 million unit here, aren't we? how would they drive it off the road. >>t would be easy to drive the off the road. consumers are buying cars, great deals and great product as well. think what happened in 2008. consumers wanted to buy cars. lenders weren't lending because of the recession. if you got your taxes increased. that means you have less expendable cash. you will start thinking maybe i don't want the car payment. my taxes went up. fiscal cliff could cause some people's taxes to go up enough. adam: they tight enup spending. >> tight enup spending. lenders do the same thing on the backside. i don't know if you will have your job. i don't know if the credit rating will hold back letting money go. adam: what you described this is a great lesson in
federal reserve speak. this is negative feedback loop. everyone tightening out of fear. let's take it a step further. we don't know what the tax situation will be and lay in tax returns, people use that for down payment when would they get that to put a down payment on a car, right. >> people think i don't have the money. maybe i don't want to maintain my existing car. we hope that is the case. nine out of 10 cars have something wrong with them on the road. if you don't do the basic maintenance that may be only way to keep your job to get your family to where they want to go. that is all dollars and cents. adam: in new york, nine out of tense cars the big problem is the driver in the other car. >> that is all across the country. adam: before we get to the fun game we want to do with you, is there any way to avoid this? are consumers pretty much freaked out right now and we'll start the year off poorly in the car industry? >> if you have a good credit rating you do have a new vehicle, one of the smartest things you can do is pick up incentives by end of the year. you have a few days left.
great deals out there. use the incentives. use consolidation sites. go to the manufacturers, negotiate, if those cliff comes, people in really good position will be having a deal. adam: lauren loves must tanks. i love the new ford fusion. lauren can you maim this car? first car up. what is that? >> i'm trying to see what. looks like studebaker. adam: it is a studebaker. 53 star liner. next car. >> that is your kind of car. adam: that is my kind of car. >> looked like a cord. adam: 38 auburn. >> 38 auburn. adam: last car. >> make it a shell by. adam: what is that? >> hard to see, from here looks like it is a chrysler or impala convertable. adam: 64 studebaker convertable. previouslied owned by yours strul truly. >> you're studebaker all the way. adam: should havknown that. >> avanti and studebaker. adam: studebaker went off the fiscal cliff 50 years
ago. >> a lot of car companies. think about amc and everything. all about dollars and cents. it really is. do your homework and don't pay retail. adam: not about dollars and cents with studebakers. lauren fix, thank you very much. new pending home sales leap to the highest level in 2 1/2 years. a top resail expert says this is the best time to put your house on the market. we'll explain why. president obama is expecting to comment on the fiscal cliff. he is expected to take his place behind the podium any minute. you don't want to go away. it is always about money. [ male announcer ] this is the age of knowing what you're made of. why let erectile dysfunction get in your way? talk to your doctor about viagra. ask if your heart is healthy enough for sex. do not take viagra if you take nitrates for chest pain; it may cause an unsafe drop in blood pressure. side effects include headache, flushing, upset stomach, and abnormal vision. to avoid long-term injury, seek immediate medical help for an erection lasting more than four hours.
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adam: we're waiting for president obama to take the podium at any moment to make comments on the fiscal cliff. joining us right now outside the white house is rich edson with a preview what we might hear from the president. anything leaking from the hill? >> well, adam, it is basically over the next 24 hours congressional leaders led by senate leaders, senate majority leader harry reid or senate minority leader mitch mcconnell will continue to work o a proposal from what the president laid out earlier today which as we reported earlier was essentially a smaller version of what the white house has wanted all
along, only dealing with tax rates specifically, keeping taxes where they are for families earning less than $250,000 a year, and an extension of unemployment benefits. now it goes back to senate leaders. over the next 24 hours they will try to craft a proposal that can pass both houses of congress. the senate will not be in tomorrow. so congressional leaders can focus on work on the fiscal cliff. some of the buzz around washington has been, if you look at what could possibly pass the house and sena, you're loing at perhaps an income threshold of about four to $500,000 a year, maybe less, to prevent those taxpayers, those amounts from having to pay additional taxes or watching their taxes go up. some of the other proposals on employment insurance. the doc fix, preventing doctors from getting a massive pay cut at the end of the year. right now congressional leaders will try to cobble something tother with democratic and republican votes that can pass both the
house and senate. the next 24 hours on this one, adam, very critic. adam: rich, if it is just taxes and extension of unemployment benefits where do they get money to pay for unemployment benefits? we're about to hit the debt ceiling and will have 110 billion in spending cuts come january 1? >> that is what makes this difficult. if the debt ceiling is part of this and there are no spending cuts this will not pass the house. i hear from congressional republicans that only extends current rates for $250,000 a year and below is something that will not pass the house. republicans and democrats have to be careful how they cobble this together. republicans will want spending cuts as part of any preliminary deal to get this together to get it through the house and get enough republican support to get this done. without that, any deal would be pretty tough to get through, especially on the house side. adam: rich i apologize for keeping you out in the cold but we're trying to give the
president time to get to the podium. i want to keep you here especially when he starts to speak. >> sure. adam: this deal, sounds much ado about nothing. sounds almost dead on arrival. doesn't sound like this is a doable deal. >> it avoids the tax increase if that is something on the tax side they get done. there were also some spending cuts that the vice president and house majority leader eric cantor negotiated a year 1/2 ago that were put on the table. perhaps if you include some of that you increase some of the spending. what the democrats will be the spending on doctors fix, that is preventing doctors from getting a pay cut if they treat medicare patients and extending patch for alternative minimum tax to insure 10 of millions of americans don't have to pay the amt for this year, that is something congress typically does at the end of every year. it is not honest budgeting in washington. these are ideas that have come about basically as democrats and republican haves to throw the spending
together at the end of every year. adam: we have about a minute before the president will start speaking the spending cuts that are on the table, there are a lot of people say that is enough to put the economy into recession. is that going to keep the democrats from possibly approving this deal? >> depends on the spending cuts. right now you're talking about $94 billion in what is known as the sequester. that is just for next year alone. automatic spending cuts to have to defense, half into other domestic discretionary spending. that combined with the tax increases yes, the con aggressional budget office says yes enough to put us into recession. adam: very quickly, what do you expect to hear from the president? is there anything he says that will especially get your attention? i know that you will be paying attention but will that perk your ears up? >> any type of optimism he expects this will get done. the president hopes republicans and democrats put a deal together and gets pass the senate or else he want his plan voted on up or down in the house and senate. adam: if they do get the
plan worked out on in the next 24 hours, will it be time to get done before january 1. >> will be tough. house has to post for three days. we may end up going over the cliff for a few days if it passes congress. adam: can't they stop the clock. literally stop the clock at least congress time doesn't advance. >> there are rules broken by those who set them. that is something congress can do. it can basically decide to violate its own rule and bring to the house floor something early. still to get the republican votes along they will want that three-day rule. they will want to make sure people have time to read the bill, something they criticized democrats for in their control of congress a couple of years ago. adam: doesn't sound, if this is actually the deal the president, if he actually gives us details, if this is the deal, we're still basically where we have been except on the tax issue. we raise 80 billion roughly in new taxes and we still have 920 billion to cut in
spending. we face this fight with a new congress, right? >> yeah. this would be another can-kicking exercise. it would also likely or possibly include any type of spending reform or tax reform to be continued through next year. adam: there's the president. rich, thank you. >> for the past couple of months i've been working with leaders of both parties to try and forge an agreement that would grow our economy and shrink the deficit. a balanced plan that would cut spending in a responsible way but also ask the wealthiest americans to pay a little more. and above all, protect our middle class and everybody who is striving to get into the middle class. i still want to get this done. it is the right thing to do for our families, four or businesses and for our entire economy but the hour for immediate action is here. it is now. we're now at the point where in just four days every american's tax rates are
scheduled to go up by law. every american's paycheck will get consider bring smaller. and that would be the wrong thing to do for our economy. it would be bad for middle class families and it would be bad for businesses that spend, depend on family spending. fortunately congress can prevent it from happening if they act right now. i just had a good and constructive discussion here at the white house with senate and house leadership about how to prevent this tax hike on the middle class. and i'm optimistic we may still be able to reach an agreement that can pass both houses in time. senators reid and mcconnell are working on such an agreement as we speak. but, if an agreement isn't reached in time between senator reid and senator mcconnell, then i will urge senator reid to bring to the
floor a basic package for an up-or-down vote, one that protects the middle class from an income tax hike, extends the vital lifeline of unemployment insurance to 2 million americans looking for a job, and lays the groundwork for future cooperation on more economic growth and deficit reduction. guys, i can hear you over here. i believe such proposal could pass both houses with bipartisan majorities. as long as those leaders allow it to actually come to a vote. if, members of the house or the senate want to vote no, they can but we should let everybody vote. that's the way this is supppsed to work. if you can get a majority in the house and get a majority in the senate then we should be able to pass a bill. so the american people are watching what we do here. obviously their patience is already thin. this is deja vu all over again. america wonders why it is that in thisown for some reason you can't get stuff
done in an organized timetable. why everything always has to wait until the last minute? well, we're now at the last minute and the american people are not going to have any patience for a politically self-inflicted wound to our economy. not right now. the economy is growing but sustaining that trend is going to require elected officials to do their jobs. the housing market is recovering but that could be impacted if folks are seeing smaller paychecks. the unemployment rate is the lowest it has been since 2008, but already you're seeing businesses an consumers starting to hold back because of the dysfunction that they see in washington. economists, business leaders, all think that we're poised to grow in 2013. as long as politics in washington don't get in the way of america's proess. so we've got to get this
done. i just want to repeat. we had a constructive meeting today. senators reid and mcconnell are discussing a potential agreement where we can get a bipartisan bill out of the senate over to the house and done in a timely fashion s that we met the december 31st deadline. but given how things have been working in this town we always have to wait and see until it actually happens. the one thing that the american pple should not have to wait and see is some sort of action. so if we don't see an agreement between the two leaders in the senate, i expect a bill to go on the floor and i have asked senator reid to do this, put a bill on the floor that makes sure taxes on middle class families don't go up, that unemployment insurance is still available for two million people, and that lays the groundwork then for additional deficit reduction and economic growth steps
that we can take in the new year but let's not miss this deadline. that is the bare minimum we should be able to get done and it shouldn't be that hard since democrats and republicans both say they don't want to see taxes go up on middle class families. and, i just have to repeat, you know, outside of washington nobody understands how it is that this seems to be a repeat pattern over and over again. ordinary folks, they do their jobs. they meet deadlines. they sit down and they discuss things and then things happen. if there are disagreements they sort through the disagreements. the notion that our elected leadership can't do the same thing is mind boggling to them. and it needs to stop so i'm modestly optimistic that an agreement can be achieved. nobody will get 100% of what
they want but let's make sure that middle class families and the american economy and in fact the world economy are not adversely impacted because people can't do their jobs. all right? thank you very much, everybody. >> mr. president? adam: rich, we just have a few minutes to wrap this up. he is leaving it in the hands of harry reid and mitch mcconnell. can they craft a package that members of speaker boehner's caucus would approve? that is what it is going to take, isn't i >> it is. and it could be possible, adam. e next 24 hours will let us know. we have a reedout from our colleague henry, according to a senior white house official exactly how this meeting went down. this according to a white house official. basically the president said, you know, look if the speaker can not come up with some type of compromise, or republican and democratic leaders can not come up with some kind of compromise, would they put up the president's plan $250,000
below vote in the house, the white house officials said the speaker was noncommittal. the white house officials said that it does not appear that the debt ceiling is part of this. that is a major obstacle for republicans in the house. they said that they wanted for the president a four year plan the debt ceiling. it could help carve the vote. adam: when the president says nobody gets 100% of what they want, is he tipping his hat that perhaps, okay, it won't be a tax increase on 250,000, but maybe the higher 400 or 500,000 for the tax increase?